Trump Shakes Up Fed with New Appointment, Eyes Powell’s Successor

US Donald Trump announced a bold move for the Federal Reserve, nominating Stephen Miran to temporarily fill a vacant governor seat, keeping options open for selecting Jerome Powell’s successor as Fed Chair in May 2026. Miran’s appointment, pending Senate confirmation, follows Adriana Kugler’s unexpected resignation on August 1, whose term was set to end on January 31, 2026. This strategic move allows Trump to shape monetary policy in the near term while maintaining flexibility for the Fed’s long-term leadership, with Christopher Waller emerging as a top contender to replace Powell. Markets displayed cautious sentiment amid these developments, reflecting uncertainty about the Fed’s future direction.

Stephen Miran, a key Trump adviser, is expected to push for a more accommodative monetary policy, aligning with Trump’s calls for rate cuts to boost the economy. Known for his skepticism of the Fed’s independence, Miran has previously advocated for greater presidential control over the central bank, including the ability to remove governors without cause. He also proposed a four-year cooling-off period to limit political influence by preventing Fed officials from immediately joining the executive branch. However, his role on the Federal Open Market Committee suggests a focus on looser policy, diverging from his earlier concerns that rate cuts in September 2024 were premature given inflation above the Fed’s target.

Miran’s nomination arrives at a pivotal moment, with inflation rising due to recent U.S. tariffs and a weakening labor market fueling stagflation fears. His belief that Trump’s deregulatory reforms could increase supply and lead to deflation contrasts with his prior warnings about persistent inflation. With only four monetary policy meetings before January 2026, Miran’s immediate impact may be constrained, but his presence bolsters Trump’s influence over the Fed’s trajectory. Senate confirmation faces hurdles, as Democrats delay the process, and with senators on recess until September 2, Miran’s role may not be confirmed before the critical September 16–17 meeting.

Market sentiment remains cautious, with investors closely monitoring upcoming U.S. data, including the Consumer Price Index and Retail Sales, alongside Fed commentary, to assess the implications of Miran’s appointment. As Trump strengthens his grip on the Fed’s future, markets are bracing for a transformative period that could redefine monetary policy and economic expectations.